Business leaders decry plan to raise DWP rates

Los Angeles Mayor Antonio Villaraigosa’s plan to boost rates at the Department of Water and Power has drawn an outcry from business leaders who fear that his promise to create “green jobs” will be accomplished at the expense of their own workers.

As he pushes the City Council to approve rate increases of up to 22% for businesses, Villaraigosa’s clean-air ambitions have run head-first into his job goals -- and his promise to treat L.A.-based companies with extra care.

Villaraigosa delighted business leaders two months ago when he hired a retired investment banker as his new “jobs czar” and offered to refocus his administration on the economy. That goodwill has largely evaporated in recent weeks, with executives warning that they may have to deal with the rate hikes by laying off workers.

The environmentally friendly positions envisioned by the mayor are “not more important than the jobs that need to be preserved and supported now,” said Glen Berryhill, vice president of property management for Thomas Properties Group.

“You don’t want to risk the jobs you have for the jobs you might have in the future,” said Carol Schatz, president and chief executive of the Central City Assn., a downtown business group.

Chief Deputy Mayor Jay Carson and Villaraigosa’s deputy chief of staff, Matt Szabo, attempted some damage control on Monday, acknowledging to dozens of business leaders that they should have consulted with them more about the plan.

Meanwhile, the mayor plans to continue his campaign for the rate increases Thursday by conducting a news conference along with former Vice President Al Gore via satellite from Nashville.

An hour later, a City Council committee will begin reviewing the plan, which would also boost electricity rates for households by 9% to 28%.

Mayoral spokeswoman Sarah Hamilton said she sees no conflict between Villaraigosa’s jobs promises and his renewable energy plan, which she estimated would result in the installation of thousands of solar panels, creating 16,000 jobs in that field.

An additional 1,600 positions would be for DWP “green doctors,” who would tell residents whether their homes could be more energy-efficient, she said.

That concept has won the support of Councilman Richard Alarcon, who said that, as Los Angeles shifts to a green economy, some businesses will need to make “bottom-line decisions” about whether they can continue to operate. “There are going to be more businesses that will not succeed. But if they don’t succeed, we want it to be for the right reasons -- because we are moving the economy in the right direction,” he said.

That message is different from the one offered two months ago by Villaraigosa’s jobs czar, Austin Beutner, who was hired to attract and retain businesses. As he made the rounds to civic groups, Beutner promised to change the mind-set at City Hall and treat businesses as “customers.”

Gary Toebben, president and chief executive of the Los Angeles Area Chamber of Commerce, said that practice was not in place when Villaraigosa announced the rate hikes. Businesses were blindsided when the DWP board approved the increases three days after they were unveiled -- with the first going into effect April 1.

“We wouldn’t do this to our customers,” Toebben said. “And it doesn’t feel like the way customers should be treated, to find out one week that a rate increase of this size is going into effect two weeks later.”

The mayor’s team said the DWP needed the revenue, in part, to comply with state regulations that penalize utilities for using dirtier coal. They also said businesses would find some relief by embracing a Villaraigosa plan to allow them to install solar panels and sell excess energy back to the city.

“In some cities where this has been done, businesses have made money,” Hamilton said.

Despite those promises, some business leaders said Villaraigosa should be willing to scale back his renewable energy plans, which are more aggressive than the state’s clean-air law. The mayor needs the extra money, in part, to meet his goal of having 20% of the DWP’s portfolio come from wind, solar and geothermal power by Dec. 31.

“The goals are well intentioned,” said Schatz of the Central City Assn. “But they need to be revised, just as every resident and business has revised their personal goals in light of this recession.”

david.zahniser@latimes.com